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Cost Segregation Services

May 16, 2022
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Accelerate Growth Through Calculated Depreciation

Cost segregation is a strategic cash tax planning tool that allows property owners to increase their cash flow through the acceleration of depreciation deductions and deferral of tax payments.

The process involves “segregating” a portion of the building into shorter lived assets. The ideal timeframe in which to conduct a cost segregation analysis is within the same year a building is constructed or an existing structure was purchased. However, this planning tool can also be implemented on a structure that was constructed or acquired several years earlier, thanks to the IRS “catch-up” provision that offers a taxpayer the opportunity to realize any missed depreciation without having to file an amended tax return.

Do Any of the Following Apply to Your Business?

  • Did you acquire, build or renovate any commercial building on or after January 1, 2006?

  • Are you planning on acquiring, building or renovating any property in the next 12 months?

  • Are you planning on expanding your existing facilities?

  • Are you planning on demolishing any property?

The PLUS—Why Choose Cherry Bekaert

Additional benefits to computing a Cherry Bekaert cost segregation study:

  • Breaks your building down into the various systems called Units of Property, as defined in the tangible property regulations, which can be used as a guideline for future capitalization and expensing of improvements
  • Identifies the viability of potential Energy credits, deductions, rebates and exemptions
  • Discovers potential personal and real estate property tax opportunities to save you money

Cost Segregation Services

Cherry Bekaert’s cost segregation services can provide:

  • A substantial reduction in tax liabilities/lower tax bracket status
  • Reduced current year estimated payments
  • Accelerated depreciation
  • Increased cash flow
  • The opportunity to claim “catch-up depreciation” from previously misclassified assets
  • The ability to write-off building components as they are replaced
  • Easy identification of leasehold improvements when a tenant moves out
  • Reduction of real estate property taxes
  • Shorter depreciable lives for partner buyouts and step-ups

In our experience, through cost segregation studies, we’re seeing between 10%-60% average reclassification of a building’s costs into shorter lived assets. Below is a breakdown of these reclassifications by building type:

Cost Segregation Services Statistics